Q: Buyers ask to access property before settlement

[babushka]

We have sold one of our investment properties. The contract was exchanged this week for settlement in mid-December. The buyers (via their solicitor) have asked if they could access the house to mow the lawns, store their things in the house, and put in new floor covering. What should we do as sellers?

Previous tenants moved out 4 months ago. The house has been vacant since then. We had the property repaired and cleaned up, put it on the markets 3 months ago, and it was sold within 2 weeks. It took a while for contract exchange because buyers had to refinance their flat for rent etc.

Conveyancers have suggested that we should ask for a copy of their building & contents insurance - because we don't want to be liable if their things are stolen. And, they can have the keys to house each day to work on the floors, but should not be allowed to stay overnight, taking their liberty.

Someone has suggested that maybe it would be easier if we allow the buyers to move in before settlement to do their work, but they should pay us rent. We would need to read the water and electricity meters as they will be using these.

Would appreciated some thoughts on this. We are flexible (as the house is vacant) and not difficult as we understand how buyers may want to spruce up the house and gardens before moving in for Christmas (particularly with children).

 

[Peter_Tersteeg]

I wouldn't allow this. What happens if they tear up the floors, then at the last minute can't settle on the purchase?

I would allow limited access to take measurements and get quotes, but not to move things in or make any modifications whilst you still own the property.

 

[babushka]

Thanks, Peter, for your views.
I have done a bit more research on this question, and found some mixed views. Some sellers would only allow limited access to measure & quote (but not to move things in or make modifications). Some would allow possession before settlement with certain terms & conditions (like insurance, indemnity). Others would rent to the buyers (and ask for an early release of the deposit!).
I have read that the buyers will have more risks than we, because if the settlement falls through then the new flooring stays with us. They will have possession, but not ownership.
We are also asking the RE agent who has our sale listing, to see what he thinks. Since the house is vacant, we do not have a huge issue with buyers wanting access to the property. They are going to live in the house, and rent out their flat (they currently live in their flat).

 

[Scott No Mates]

Early access - get them to sign a lease (even if it is for a nominal amount) that way you can add/specify the works that they are permitted to undertake & have no issue with them staying.

Plenty of people on the forum have asked for early access during settlement so they can get it back onto the market (sale/rental) shortly after settlement).

 

[babushka]

Thanks, Scott, for your suggestions. Hubby decided that we will tell buyers to sign a rental / lease agreement (like you suggested) with a nominal amount of rent - with us agreeing for them to put in new flooring, but we want indemnity and evidence of insurance (not just cover note). But, if buyers don't want to pay rent, then we ask for an early release of the deposit (plus indemnity and insurance).

 

[sanj]

I would also ask them to increase the size of deposit up to a minimum of 10% prior to taking possession

 

[willair]

Conveyancers have suggested that we should ask for a copy of their building & contents insurance - because we don't want to be liable if their things are stolen. And, they can have the keys to house each day to work on the floors, but should not be allowed to stay overnight, taking their liberty.
.

I would not let them in until the contract is settled,and depending on how many trades people that will come on site prior too the settlement ?,a quick phone call to your insurance company I know there would be something in the contract about this..imho..

 

[Terry_w]

Thanks, Scott, for your suggestions. Hubby decided that we will tell buyers to sign a rental / lease agreement (like you suggested) with a nominal amount of rent - with us agreeing for them to put in new flooring, but we want indemnity and evidence of insurance (not just cover note). But, if buyers don't want to pay rent, then we ask for an early release of the deposit (plus indemnity and insurance).

You should be asking your solicitor these questions.

I would not recommend letting them in as there is no benefit to yourself but only potential downside. What is there is a scratch on the floor - you blame them they blame you. They refuse to settle. You rescind the contract and look for a new buyer only to find their 30 day lease has a statutory minimum term of 6 months = for example.

 

[handyandy]

I would also ask them to increase the size of deposit up to a minimum of 10% prior to taking possession

I would also get the deposit released.

 

[Propertunity]

You should be asking your solicitor these questions.
I would not recommend letting them in as there is no benefit to yourself but only potential downside. What is there is a scratch on the floor - you blame them they blame you.

^ ^ what Terry said.

What it they turn on the hot water and the HWS fails before settlement? Or they discover the shower (which has not be used for 4 months) leaks? Or any number of other maintenance issues?
Then you are left having to fix these things before settlement.

I've seen it happen before - and would not recommend it. There is only downside risk in it for you.

 

[neK]

Agreed with the others.
I would only allow for access to MEASURE.

I would also allow them to mow the lawn if thats what they wanted. But no gardening / landscaping beyond that point.

 

[RPI]

You can mitigate the risks by doing a lot of things, getting agreements, deposits, ensuring that it is subject to them accepting the property on as is where is basis etc etc. We have clients do so regularly but usually where it is the seller's bank holding up settlement and the new buyers have no where else to live.

 

[Perp]

I wouldn't agree to this without them having a lot to lose - e.g. early release of at least 5-10% deposit.

And be careful letting them rent for a nominal amount. What happens if they decide not to, or can't, settle, and then don't want to leave? You may be forced to have them there for many months paying a nominal rent...